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Abstract

Organizations that provide subsidized services to needy people are frequently

discouraged from competing with one another. Many policymakers

view the duplication of the competitive market place as wasteful, and stress

coordination, not competition. They claim that quality can be controlled by

direct regulation and by the participation of needy clients in suppliers' decisions.

Many of these attempts to improve quality have, however, been failures. Direct regulation has proven expensive and has often been ineffective. Attempts to raise the quality of services through client participation on boards of directors and advisory groups have often floundered on the indifference and inaction of client representatives.

In response to these difficulties some commentators have looked to economic

analysis for help in obtaining high-quality social services. Isolating

providers from the market, these commentators claim, will not eliminate

unnecessary duplication, but will instead lead to low quality, wasteful operations. Various plans have therefore been offered for exposing social service